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Operations Management

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  1. Operations Management Michael Lau

  2. Self-introduction

  3. Introduction to the class • Attendance • Group-work • Examination

  4. Organization • Finance • Operations • Marketing

  5. Finance • Responsible for securing financial resources at favorable prices and allocating those resources throughout the organization. As well as budgeting, analyzing investment proposals , and providing funds for operations.

  6. Operations • Responsible for producing the goods or providing the services offered by the organization

  7. Marketing • Responsible for assessing consumer wants and needs, and selling and promoting to organization’s goods or services.

  8. Question 1 • List the three parts in order to importance. • Why?

  9. Supply Chain • Closely linked with operations • It is the sequence of organizations- facilities, functions, and activities. • Facilities: • Functions and Activities: • Supply chains are both external and internal to the organization.

  10. The essence of the operations • Value-added: • 1. for-profit organizations: • 2. non-profit organizations:

  11. Goods and Services • Goods: physical items • Examples: • Services: activities that provide some combination of time, location, form or psychological value • Examples: • Joint production.

  12. Goods and Services • Production of goods results in a tangible output. • Delivery of service implies an act

  13. Question 2 Compare the points • Degree of customer contact • Labor content of jobs • Uniformity of inputs • Measurement of productivity • Quality assurance • Inventory • Wages • Ability to patent

  14. Process Management • Upper-management process • Operational processes • Supporting processes • Purpose: to meet the demand

  15. Process Variation • 1. The variety of good/services being offered • 2. Structural variation in demand • 3. Random variation • 4. Assignable variation

  16. Scope of OM • Forecasting • Capacity planning • Facilities and layout • Scheduling • Managing inventories • Assuring quality • Motivating and training employees • Locating facilities

  17. Group-work • University: • Forecasting: labor market/further education • Capacity planning : students/teachers • Facilities and layout : multimedia classroom/pool • Scheduling : students/teachers • Managing inventories : backup • Assuring quality : outline/communicate • Motivating and training employees : rules • Locating facilities : make the best of every facility

  18. Decision making • System capicity • Geographiclocation of facilities • Arrangement of department/Placement of equipment • Product and service planning • Long-term

  19. Adjustment manking • Personnel • Inventory planning • Scheduling • Project management • Quality assurance • Short-term • ADVISE TO

  20. Other areas • Purchasing • Industrial engerneering • Dstribution • Maintenance

  21. 4 Ws • What: what do we need? How many/much do we need?how to arrange them? • When: when should we get the money/human resource? when should we give the outline? When should we correct the mistakes? • Where? • Who?

  22. Historical Evolution • Scientific management: • Fredrick Taylor--“perfect”:best methods, best person, best outputs. Workers did not like it. • Mass production: low-skilled works use specialized machinery • Division of labor • Interchangeable parts

  23. The human relations movement: McGregor • X theory: “rewarded or punished” • Y theory: “make labor love their jobs” Decision Models: statistical-sample theory Japanese: “quality revolution” “lean production”

  24. Operations Today • E-business • 6 sigma: .cut the time and cost • .productivity improvement • .precess yield improvement • .quality improvement • .increasing customer satisfication

  25. Key issues • Economic conditions • Innovating • Quality problems • Risk management • Comparing in global economy

  26. Environmental Concerns • Sustainability: using resources in ways that do not harm ecological systems that support human existence. • Areas affected: product and service design, consumer education, disaster preparation and response, supply chain waste management, outsourcing decisions.

  27. Ethical Conduct • Financial statements • Worker safety • Product safety • Quality • The environment • The community • Hiring and firing workers • Closing facilities • Workers’ rights

  28. 5 Principles • Utilitarian Principle • Rights Principle • Fairness Principle • Common Good Principle • Virtue Principle

  29. Need to manage the supply chain • The need to improve operations • Increasing levels of outsourcing • Increasing transportation costs • Competitive pressures • Increasing globalization • Increasing importance of e-business • The complexity of supply chains • The need to manage inventories

  30. Summary • Operations function: • It consists of: • The final goal of operations: • There are variation in all the processes. • Similarities/Differences between goods and services • Environmental issues/ethical issues • Managements of supply chain

  31. Set a frame

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